Mortgage rates fell for the third consecutive week, providing a small yet significant relief for borrowers. According to the Mortgage Bankers Association’s (MBA) seasonally adjusted index, total mortgage demand increased by 5.4% compared to the previous week. This surge in activity was largely driven by homeowners seeking refinancing opportunities to save on their current loans.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) dipped slightly to 6.67% from 6.69%. Additionally, points for loans with a 20% down payment decreased marginally from 0.67 to 0.66, making refinancing more appealing to homeowners.
Refinance applications experienced a remarkable 27% week-over-week increase and were 42% higher than the same period last year. This surge reflects a significant opportunity for homeowners to lock in lower rates, as rates last week were 40 basis points lower than the same week in 2023.
Purchase applications also showed resilience, with annual gains in all but one week over the past three months. Joel Kan, an MBA economist, noted in a release, “In addition to lower rates, purchase activity continues to be supported by sustained housing demand and inventory that continues to grow gradually in many markets.”
With housing demand holding steady and inventory levels improving, the combination of lower rates and a growing supply of homes offers a glimmer of hope for prospective buyers and refinancers alike.